New car sales edge upwards

Sales of new cars in the UK increased during August, but private buyers became more hesitant regarding the purchase of a new car.

The official figures showed that 81,640 new cars were registered during the month, which was a 3.3 per cent increase on the same period last year.

The number of new cars being registered has hit a total of 1.68m so far this year, which was on a par with the previous year. 2015 was in itself a record-breaking year for the industry, with just under 2.7m registrations made.

Private buyers have been less active so far, however, with the number of cars purchased down by 0.2 per cent on the month – an indication of a general downward trend over the last few weeks.

Sales in the fleet market continued to be excellent, with an increase of 7.7 per cent, as companies sought to renovate their fleet through purchasing new vehicles. 44,352 fleet units were registered in August, which represented a 6.4 per cent increase on August 2015. Fleets and business registrations accounted for 54.8 per cent of the market at 921, 520 so far this year.

Diesel demand suffered a marginal fall of -0.2 per cent, with petrol registrations moving ahead 5.3 per cent. Alternatively-fuelled vehicles (AFVs) also saw significant growth of 30.8 per cent year on year, with almost 54,000 AFVs being registered so far, compared to over 44,000 last year.

Consumer confidence has already been cited as a major reason for the continued positive performance of the industry, with the impact of Brexit yet to be firmly defined. It’s considered possible that the Bank of England’s decision to halve interest rates to 0.25 per cent may have impacted sales figures.

Mike Hawes, chief executive for the Society of Motor Manufacturers and Traders (SMMT) – who were responsible for collating the figures – did note that August can skew the figures, as many buyers choose to delay their purchase in order to buy a vehicle with the latest registration plates.

Mr Hawes said: “August is traditionally one of the quietest months as consumers look ahead to the September plate change, so growth, albeit small, is good news.

“The key to maintaining this strong market is consumer confidence for which we look to government to deliver the conditions for economic growth.”

Volkswagen’s decline in the wake of the emissions scandal has also continued, with market share falling by a quarter when compared to last year. Overall, though, performance hasn’t been as low as many expected, with the company falling to 7.7 per cent of market share in the first eight months of 2016.